Digitide Q2 PAT rises 204% as EBITDA margin reaches 10.4%

Digitide Solutions Limited reported profit after tax of Rs 8.9 crore for Q2 FY27, up 204% from Q1 FY27, while its EBITDA margin rose 45 basis points to 10.4% even as revenue fell 2.0% sequentially to Rs 759.6 crore after contract repricing and exits from low-margin business.

Why did Digitide's revenue decline in Q2 FY27?

Digitide's Q2 FY27 revenue declined 2.0% quarter on quarter and 0.6% year on year to Rs 759.6 crore, from Rs 775.1 crore in Q1 FY27 and Rs 764.2 crore in Q2 FY26. Management attributed the sequential decline to a disciplined approach to deal selection, while the chief financial officer said Digitide had repriced contracts and exited low-margin business.

The decline was concentrated in business process management, or BPM, which generated Rs 516.1 crore in Q2 FY27, down 4.0% from Rs 537.7 crore in Q1 FY27. Domestic revenue fell 8.9% sequentially to Rs 436.8 crore, reducing its revenue share to 57.5% from 61.9% in the preceding quarter.

Revenue for H1 FY27 nonetheless increased 2.3% year on year to Rs 1,534.7 crore from Rs 1,500 crore in H1 FY26. That half-year growth was recorded despite BPM revenue declining 1.9% to Rs 1,053.8 crore and domestic revenue falling 3.3% to Rs 916.3 crore.

How did Digitide improve PAT and EBITDA margin?

Digitide increased earnings before interest, tax, depreciation and amortisation, or EBITDA, by 2.5% sequentially to Rs 78.8 crore in Q2 FY27 from Rs 76.9 crore in Q1 FY27. EBITDA margin expanded by 45 basis points, or bps, to 10.4%, although it remained below the 11.1% reported in Q2 FY26.

Reported profit after tax, or PAT, rose to Rs 8.9 crore from Rs 2.9 crore in Q1 FY27 and Rs 2.8 crore a year earlier. PAT margin reached 1.2%, an 80 bps sequential increase from 0.4%, and management said Q2 FY27 contained no exceptional items.

The half-year comparison remained below the prior year on profitability. H1 FY27 EBITDA declined 7.2% year on year to Rs 155.7 crore, EBITDA margin fell 104 bps to 10.1%, and reported PAT decreased 4.8% to Rs 11.9 crore from Rs 12.5 crore in H1 FY26.

Which parts of Digitide's revenue mix grew in Q2 FY27?

Digitide's Tech & Digital, or T&D, business grew 2.6% sequentially and 6.6% year on year to Rs 243.6 crore in Q2 FY27. T&D contributed 32.1% of total revenue, up from 30.6% in Q1 FY27 and 29.9% in Q2 FY26, while BPM's contribution declined to 67.9% from 69.4% a quarter earlier.

International revenue was the other expanding part of the mix, increasing 9.2% quarter on quarter and 13.5% year on year to Rs 322.8 crore. Its share of Q2 FY27 revenue rose to 42.5% from 38.1% in Q1 FY27, contrasting with the domestic revenue decline to Rs 436.8 crore.

The H1 FY27 segment trend also favoured T&D and international operations. T&D revenue increased 13.0% year on year to Rs 480.9 crore, while international revenue rose 11.9% to Rs 618.4 crore; those movements contrasted with the declines in BPM and domestic revenue over the same six-month period.

What do Digitide's bookings and AI-led revenue show?

Digitide recorded about Rs 400 crore of total contract value, or TCV, bookings in Q2 FY27, a 95% sequential increase supported by 34 key logo wins. Management said its H2 FY27 priority is to accelerate conversion of those bookings into revenue.

AI-led revenue doubled sequentially to Rs 30.5 crore and represented 4.1% of Q2 FY27 revenue, compared with 1.9% in Q1 FY27. Digitide said it has embedded artificial intelligence across AI-infused BPM, AI-enabled platforms, and Data, AI and Cloud-led professional services.

Digitide also disclosed strategic alliances with AWS and Anthropic and a plan to scale its global capability centre, or GCC, offering through a Build-Operate-Transfer model. Dedicated India and international sales teams formed part of the go-to-market approach that management said drove the 95% quarter-on-quarter TCV increase.

What is Digitide focusing on in H2 FY27?

Digitide entered H2 FY27 with net cash of Rs 76 crore and management's stated focus on profitable growth, cash generation and AI-led transformation. The company said its one-enterprise operating model was in place after leadership resets across business units, sales and corporate functions.

Management's stated second-half priorities are to convert about Rs 400 crore of Q2 FY27 bookings into revenue, improve collections and working capital, and shift the mix towards T&D, international and AI-led businesses. These actions follow Q2 FY27 contract repricing and exits from low-margin work, which management said were intended to improve cash and working capital.

Digitide did not disclose a quantified revenue, margin or PAT target for H2 FY27. It instead identified its operating measures after a quarter in which international revenue reached Rs 322.8 crore and T&D revenue reached Rs 243.6 crore, while total revenue was Rs 759.6 crore.

Conclusion

Digitide's Q2 FY27 results show a sequential recovery in profit and margin on a smaller revenue base. EBITDA increased 2.5% to Rs 78.8 crore, margin rose to 10.4%, and reported PAT increased 204% to Rs 8.9 crore, while T&D and international operations gained a larger share of revenue as BPM and domestic revenue declined.

The next disclosed execution test is conversion of about Rs 400 crore of Q2 FY27 TCV bookings into H2 FY27 revenue while improving collections and working capital. Management also plans to expand its GCC Build-Operate-Transfer offering and continue shifting revenue towards T&D, international and AI-led businesses, where AI-led revenue was Rs 30.5 crore in Q2 FY27.